Some of the local earnings releases to take note of this week include:

  • SAPPI (Interim Results): In the company’s 1Q17 statement, management said that it expects the company’s operating performance to be broadly in-line with FY16, with further reduction in debt; however additional rand strength could result in a weaker performance during FY17. Consensus is looking for a 6.4% increase in full year headline earnings.
  • Vodacom (Full Year Results): In the latest quarterly update, top line growth fell short of expectations due to a stronger rand over the quarter. Overall performance was driven by strong customer growth in South Africa and strong data demand, while the effects of customer disconnections were still impacting the International operations. Consensus is looking for a 4.9% increase in headline earnings per share for FY17.
  • Netcare (Interim Results): In a pre-close trading update, the company guided for HEPS to fall by between 9% and 13% y/y, tracking behind full year market expectations (consensus: -2.7%). Management highlighted weaker trading conditions and stronger ZAR as reasons for the weakness.
  • Barloworld (Interim Results): The group guided for upbeat results in a February trading update, supported by continued strong trading within the Automotive & Logistics divisions as well an improved performance from Equipment. The firm’s order book also improved, benefiting from higher mining activity as commodity prices continue to improve.
  • Calgro M3 (Full Year Results): In a recent trading update, management said that HEPS would fall by between 3.23% and 5.23%, which disappointed the market and pointed to an accelerated decline in 2H17. The group increased its exposure to the private sector, which resulted in a temporary delay in combined revenue and profit as the group does not start construction on any open market units unless they are sold.
  • Coronation (Interim Results): In a recent statement, the company said that Assets Under Management (AUM) fell 0.3% q/q in 2Q17 to R576 billion. This represented a 5% decline on a y/y basis. Given the performance of local and international markets, the q/q deterioration may have been due to net client outflows.
  • Dischem (Full Year Results): Management guided for HEPS to fall by between 63% and 65% y/y. This was mainly due to an increase in the number of shares following the group’s listing in November (average number of shares in issue increased to ~817 thousand from ~242 thousand in the previous period). Headline earnings were expected to grow by between 20% and 23%, which was below our pre-listing expectations (+27%).
  • Other releases to take note of this week include Investec (FY17), Liberty Holdings (Sales Update), Oceana (1H17), Astral Foods (1H17), Arrowhead Properties (1H17) and Lonmin (1H17).
  • On the local corporate actions front, Tuesday marks the last day to trade in Master Drilling and Rebosis Property Fund to receive their most recently declared distributions. These counters will trade ex-dividend on Wednesday. AngloGold, Barclays Africa, JSE, Nedbank, Liberty Holdings and SA Corporate Real Estate will host AGMs this week, while Taste is expected to host a GM on Wednesday.


Earnings releases in the US are limited this week with just a few retail counters scheduled to release quarterly numbers. Based on Bloomberg expectations, Staples, Home Depot and Foot Locker will report decent bottom-line growth for the quarter while earnings for Target, Gap, Wal-Mart Stores and Ralph Lauren are expected to contract y/y. US retail sales including food services for the first quarter were relatively lacklustre, expanding by only 1.5% q/q based on data released by the US Census Bureau. According to Factset, 91% of S&P 500 companies have reported 1Q17 numbers so far with 75% having reported earnings above the mean estimate and 64% having reported sales above the overall expected average. So far, for 1Q17, the blended earnings growth rate for the S&P 500 is 13.6% – this still compares positively to the 9% expected before the start of earnings season.

In Europe, British multinational telecommunications company Vodafone and luxury fashion house Burberry are likely to grab investors’ attention this week with full year results. Whilst Burberry is expected to report solid top and bottom-line growth for the full year (expected revenue: +10.14% y/y, earnings per share: +10.13% y/y), Vodafone is expected to report a drop of 8.88% y/y in earnings and a fall of 3.53% y/y in revenue.

In the Asia-Pacific region, the focus will be on Chinese investment company Tencent Holdings. The entertainment company which Naspers has a 35% stake in is set to release first quarter numbers on Wednesday. Bloomberg forecasts are guiding for adjusted EPS growth of 36.47% y/y and revenue growth of 44.32% y/y for the quarter with operating profit growth of 35.33% y/y.


The Economics Weekly includes the full local and international economics calendars.